Barrick Gold Corporation (ABX), one of the world’s largest gold producers, posted a higher profit in the first quarter of 2021 than it did a year ago, as rising gold and copper prices boosted revenue. The Toronto-based gold miner said it was on track to meet annual forecasts.
Barrick Gold’s revenue came in at nearly $2.96 billion for the quarter ended March 31, an increase of 8.8% from $2.72 billion in the prior-year quarter. Revenues from its copper mines increased by 31% due to higher copper prices.
Meanwhile, profit amounted to $538 million ($0.30 per diluted share), up from $400 million ($0.22 per diluted share) in the first three months of 2020. On an adjusted basis, Barrick earned $507 million ($0.29 per share) in 1Q 2021, compared to an adjusted profit of $285 million ($0.16 per share) in 1Q 2020.
Barrick Gold’s President and chief executive Mark Bristow said, “When we announced the merger between Barrick and Randgold back in September 2018, we said that its rationale was to combine the industry’s best assets with its best managers to build the most valued gold business. Our management team’s record speaks for itself, and as far as assets are concerned, Barrick majority-owns and operates five of the world’s 10 largest gold mines, with a sixth in the form of Turquoise Ridge waiting in the wings. Each of our core mines has a high-confidence 10-year plan in place — and those are plans, not forecasts, which we plan to grow.”
Barrick produced and sold less gold in the first quarter than a year ago but benefited from a 12% increase in average selling price. (See Barrick Gold Corporation stock analysis on TipRanks)
Last week, J.P. Morgan analyst Michael Glick maintained a Hold rating on ABX but lowered its price target to $25.00 (C$33.00) for a 22% upside potential.
Glick stated in a research note that gold stocks have been under pressure since the start of the year due to rising real yields and falling gold prices. The analyst rolled a gold forward price of $1,730 into models through 2024 and lowered estimates and price targets accordingly.
Overall, the consensus on the Street is that ABX is a Strong Buy based on 7 Buys and 1 Hold. The average analyst price target of C$35.74 implies a 32% upside potential from current levels. Shares have plunged by more than 30% over one year.